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Sempra Energy (SRE) Beats on Q2 Earnings, Raises '17 View

Sempra Energy’s SRE second-quarter 2017 adjusted earnings per share (EPS) came in at $1.10, beating the Zacks Consensus Estimate of 80 cents by 37.5%. Earnings also improved 39.2% from the prior-year quarter figure.

GAAP earnings were $1.03 per share in the quarter, compared with 6 cents a year ago.

Total Revenue

In the quarter under review, total revenue was $2,533 million, up 17.5% year over year on higher contributions from both the energy-related businesses (up 107.4%) and utilities (10.2%). Also, total revenue surpassed the consensus mark of $2,517.2 million by 0.6%.

Sempra Energy Price, Consensus and EPS Surprise

Sempra Energy Price, Consensus and EPS Surprise | Sempra Energy Quote

Segment Update

San DiegoGas & Electric (SDG&E): Quarterly earnings were $149 million, compared with the year-ago figure of $100 million. The upside was driven by a higher California Public Utilities Commission (CPUC) base margin and lower operating expenses.

Southern California Gas Company (SoCalGas): The segment registered earnings of $58 million in the second quarter of 2017 compared with the year-ago loss of $1 million.

Sempra South American Utilities: The segment recorded earnings of $45 million in the second quarter, up from $43 million in the prior-year quarter.

Sempra Mexico: The segment recorded a net loss of $9 million, compared with earnings of $57 million recorded in the prior-year quarter. The bottom line deteriorated due to an impairment the company recorded in the Termoélectrica de Mexicali power plant, which is being held for sale, as well as unfavorable foreign-currency and inflation effects.

Sempra Renewables: The segment recorded quarterly earnings of $23 million, up from $12 million in the prior-year quarter.

Sempra LNG & Midstream: The segment reported earnings of $27 million against the year-ago quarter’s loss of $149 million.

Financial Update

As of Jun 30, 2017, Sempra Energy’s cash and cash equivalents were $223 million, compared with $349 million as of Dec 31, 2016.

Long-term debt was $15,000 million as of Jun 30, 2017 compared with $14,429 million at 2016 end.

Cash flow from operating activities was $1,889 million at the end of second-quarter 2017, up from $916 million at the end of the prior-year quarter.

In the second quarter, the company’s capital expenditures and investments were $848 million compared with $1,051 million in the prior-year period.

Guidance

Sempra Energy raised its 2017 earnings per share guidance. The company presently expects to generate earnings in the band of $5.00–$5.30, up from the earlier guidance range of $4.85–$5.25.

Zacks Rank

Sempra Energy currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Peer Earnings Review

Consolidated Edison Inc. ED posted second-quarter 2017 adjusted earnings of 58 cents per share that missed the Zacks Consensus Estimate of 61 cents by 4.9%. Reported earnings also dropped 3.3% from the year-ago figure of 60 cents.

Entergy Corporation ETR reported second-quarter 2017 operational earnings of $3.11 per share, beating the Zacks Consensus Estimate of $1.20 by 159.2%. However, the reported number was in line with the year-ago figure.

CenterPoint Energy, Inc. CNP reported second-quarter 2017 adjusted earnings of 29 cents per share, beating the Zacks Consensus Estimate of 21 cents by 38.1%. Quarterly earnings improved 70.6% from the year-ago figure of 17 cents.

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